Liquidity for Your Hotel

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The federal and provincial governments are providing financial support help businesses manage at this time. The AHLA encourages you to talk to your lender(s) about how COVID-19 is impacting your business, and keep them informed about your financial situation.

We will update this list as more information comes available. This information is intended for informational purposes only. Businesses should consult their accountant, financial advisor, or government authorities before applying or making decisions about how they should use this information.

David Lund, the Hotel Financial Coach, has some tips about how hotels can manage during a financial crisis.

Federal Resources

Highly Affected Sectors Credit Availability Program (HASCAP)

• Thanks to the lobbying efforts of the Hotel Association of Canada (HAC), the federal government has officially launched the Highly Affected Sectors Credit Availability Program (HASCAP). This is a new COVID-19 relief program to help the hardest-hit businesses with additional financing. Through this program, the Business Development Bank of Canada (BDC) will work with participating Canadian financial institutions to offer government-guaranteed, low-interest loans of up to $1 million.
• https://hascap.ca/Terms of the Program:
  • Eligible businesses can start applying as early as February 1 at principal financial institutions and more widely by February 15.
  • As a first step, you must contact your primary financial institution to get more information and to apply.
    • You can only apply to one financial institution – your primary lender.
    • If your primary lender is not participating in the program, only then may you apply via another financial institution.
  • The program will be available until June 30, 2021

• An applicant business must:
  • Be a commercial enterprise whose intent is to generate revenue from the sale of goods or services that is at least sufficient to cover its operating expenses and service its debt.
  • Have been financially stable and viable prior to the current economic environment.
  • Not have an impaired loan as at March 1, 2020, or the eligible loan closing date.
  • Other eligibility requirements may apply

• You must also fall into one of the following categories:
  • If your hotel has received the Canada Emergency Wage Subsidy (CEWS) or the Canada Emergency Rent Subsidy (CERS):
    • You must provide Canada Revenue Agency attestation forms demonstrating a minimum 50% revenue decline, for at least 3 months, within the 8-month period prior to the date of your HASCAP application.
  • If your hotel did not receive CEWS or CERS and is eligible for it:
    • You must apply for CEWS or CERS.
  • If your hotel does not qualify for CEWS or CERS:
    • You must provide financial statements that reflect at least three months (which do not need to be consecutive) of monthly year-over-year revenue decrease of a minimum of 50% per month, within the 8-month period prior to the date of your HASCAP application.
  • Your financial institution will require the above information to process your request.

• Questions about HASCAP? The Hotel Association of Canada (HAC) hosted a Q&A webinar with experts from the Business Development Bank of Canada (BDC). Watch the video here.
• See FAQs about HASCAP from HAC.

Federal Resources

Canada Emergency Rent Subsidy (CERS)

• Mortgage interest support to property owners until June 2021.
• CERS is not just for rent- it includes support for additional fixed costs including insurance, property tax, school tax and other municipal taxes.
• Update March 3, 2021: Government Extends Current Rate Structure for CERS until June 5, 2021

Small & Medium-Sized Enterprise (SME) Loan & Guarantee Program

• Additional support and access to credit through your financial institution

Business Credit Availability Program (BCAP)

Provides more than $10 billion of additional support to businesses experiencing cash flow challenges through Export Development Canada (EDC) and the Business Development Bank of Canada (BDC).

Provincial Resources

Small and Medium Enterprise (SME) Relaunch Grant

• To be eligible for the Small and Medium Enterprise Relaunch Grant, a property must:
  • have fewer than 500 employees,
  • been ordered to close or curtail operations in April or May 2020 as a result of COVID-19, and
  • have experienced a revenue reduction of at least 30% in April or May 2020 as a result of COVID-19.
• Businesses that meet the program’s eligibility criteria will be able to apply for 15% of their pre-COVID-19 monthly revenue up to:
  • a maximum of $5,000 in funding for their first payment, PLUS
  • a maximum of $15,000 for their second payment.

Eligibility for First Payment:

• For the first payment, applicants will need to show the revenue drop for April or May 2020 during the application process. See page 11 of the government’s SME Relaunch Grant guide for more information.

Eligibility for Second Payment:

• The second payment is not based on a specific revenue drop.
• The information provided during the first application is used to calculate the benefit amount for the second payment (3 times the initial payment).
• The hotel must be operating in a region affected by the public health orders in effect from November 6, 2020, including any rescinded health orders, and must have been required to curtail operations by those public health orders. The health orders that came into effect on December 8 and December 13 apply to the entire province.

Applicants who did not apply for the first payment can apply for both payments at the same time.

• To apply:
  1. Read the SME Relaunch Grant guidelines and Companion Guide.
  2. Create a MyAlberta Digital ID (MADI) account. Detailed instructions about how to do this are available in the Companion Guide. For this program, you are only required to register for a basic MADI account using a valid email (you are not required to register for a Verified Account, and do not need to verify your account with a valid driver’s licence or identification card).
  3. Once you have created a MADI account, login to the online application portal to complete your application.

Deferral & Abatement of Tourism Levy Payments for Hotels

• Hotels and other lodging providers are allowed to keep the tourism levy they collect between March 1 and March 31, 2021.
• Operators must continue to report the amounts of tourism levy collected during the abatement period by filing tourism levy returns as and when required by the Act.
• Amounts collected prior to March 1, 2020 that are being deferred under the previously announced deferral program can continue to be deferred until August 31, 2020.

Deferral of Workers’ Compensation Board (WCB) Premium Payments

• WBC has deferred 2020 WCB premium payments for all private sector employers until 2021
• When invoicing resumes in 2021, small- and medium-sized employers (those with $10 million or less in insurable earnings) will only be required to pay 50% of their 2020 premiums. The other 50% will be paid by the Government of Alberta.
• By deferring premium payments, all private sector employers will benefit from having increased financial liquidity; roughly $350 million in premiums will be waived to support 183,000 small- and medium-sized employers during these difficult economic times

Utility Payment Deferral

• The AHLA is working with government and the Utilities Consumer Advocate to help hotels manage utility costs.

Additional Resources

Alberta Tax Relief Updates

• Altus Group is monitoring Alberta tax relief programs, including municipal property taxes, and posts information on their website as it is released.

Mortgage Deferrals

• Many banking institutions in Canada have made a commitment to work with personal & business banking customers on a case-by-case basis to provide flexible solutions to help them manage through COVID.
• We encourage you to talk to your lender to make arrangements, and keep them informed about your financial situation:

Hotel Association of Canada Resources

• Hotel Operating Procedures: Self-Isolation
• Temporary Guidelines for Modified Operations
• FAQ: Taking Care of Employees and Guests
• Guidance for Employers to Plan & Respond to Coronavirus
• Hoteliers Guide: Government of Canada Economic Relief Options

Additional Liquidity & Credit Resources

Resources for Canadian Businesses (Government of Canada)

Hospitality Financial Leadership- What to Do in a Financial Crisis (David Lund, The Hotel Financial Coach)

FAQs for Reporting Financial Metrics (Smith Travel Research, PDF download)

Property Closures

In the unfortunate event that you decide to close your property, the AHLA has prepared a Sample Property Closure Checklist (Word doc file download) to assist you.

Please contact us at WeHelpHotels@ahla.ca or 780.436.6112 (toll-free 1.888.436.6112) if you have other questions or need additional support.